HARARE - Zimbabwe’s foreign direct investment (FDI) figures do not necessarily translate into instant improved economic conditions, authorities say.
Richard Mbaiwa, Zimbabwe Investment Authority (Zia) chief executive, said not all approved projects will see the light of day for various reasons.
“Another thing to note is that when a project has been approved it does not happen on the same day, gestation periods for projects differ,” he said.
This comes after concerns are being raised over statistics released by the United Nations Conference on Trade and Development (UNCTAD) revealed that FDI into the country surged by 36 percent to $545 million in 2014 from $400 million registered in 2013.
However, this is a sharp contrast to the declining economic situation in the country which saw at least 52 companies closing last year, with the loss of almost 7 000 jobs and many companies downsizing.
Desire Sibanda, Economic Planning ministry’s permanent secretary, concurred with Mbaiwa and said the figures were only a measure of perception and interest in the country.
“It is a problem worldwide, these figures that are presented are not exact investments in the strict sense, but as has been indicated by the minister of Economic Planning, Honourable Simon Khaya Moyo, we are working on an investment newsletter to fix all this,” he said.
Sibanda noted that there was need to differentiate between approvals and projects implemented “as the current figures highlight interest only”
Harare-based analyst, Issis Mwale, said the figures were deceptive as most of the projects used in compilation process had not come to fruition.
“We cannot say we measure anything based on promises or approvals, we should simply measure FDI from the implementation. I am glad you say government says it is working to differentiate approvals and implementations,” said Mwale.
Meanwhile, the UNCTAD report also showed that while the FDI inflows in Zimbabwe had increased, the country still lagged behind other peers from the southern African region.
According to the report, FDIs to Zambia increased to $2,4 billion from $1,8 billion, while inflows to South Africa fell to $5,7 billion from $8,3 billion.
Angola recorded $3,8 billion in FDIs from $7,1 billion while Botswana was flat on $390 million.
Swaziland recorded FDIs worth $13 million.
Investment-starved Zimbabwe has been desperately trying to attract FDI and access international lines of credit in order to revive its moribund economy.
Finance minister Patrick Chinamasa has already projected FDI to increase by 69 percent in 2015 on the back of continued implementation of reforms and the global community re-engagement process.